Bank Nerd Corner: CFPB, De Novos, and The Crypto-BaaS Reckoning

Fintech Takes

Welcome back to Bank Nerd Corner, featuring yours truly and #1 among all bank nerds, Kiah Haslett, Banking and Fintech Editor at Bank Director.

By the time you’re reading this, we’ve had ~3 weeks of “fun” updates from the CFPB, and we have a lot to unpack!

First up, who actually wants the CFPB gone? Gutting the CFPB won’t end consumer protection; it just shifts the burden. Funny how the loudest CFPB critics are the ones who profit most from consumer confusion. Even some bank execs admit the CFPB keeps markets fair. Referees are annoying, but you don’t want a game without them.

Next, it seems like regulators care again about de novo banks (a topic we touched on 18 months ago but hey, who’s counting?). Post-crisis regulations, slow approvals, and a weaker market for bank sales have made starting a new bank a very tough sell. Plus, new banks are facing VC-style growth pressure, often relying on risky funding just to stay afloat. But it’s not just community banks pushing for change—fintechs want in, too. So, why are fintechs suddenly advocating for more de novo charters? And did fintech and BaaS make them obsolete by offering a faster, more efficient path to scaling and returns?

Switching gears: debanking raises serious questions about how reputation factors into bank risk evaluations. If reputation matters, can’t it be weaponized? Crypto wasn’t changing the world, but regulators fumbled debanking. Transparency is key—if it’s a “no,” just say it, don’t dodge FOIA requests. Kiah nails it with this analogy: Crypto is like BaaS. Both used middleware to scale quickly, but while crypto’s risks were obvious, BaaS flew under the radar—until Synapse and cease-and-desists made it impossible to ignore.

And finally, the unanswerable question of the week: what’s FinCEN actually doing? Banks still can’t warn each other about fraud. FinCEN hoards data for law enforcement but isn’t required to use it. So, what’s the point?

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